Experimental Economics

, Volume 14, Issue 2, pp 273–285 | Cite as

Remain silent and ye shall suffer: seller exploitation of reticent buyers in an experimental reputation system



By providing incentives for sellers to act in a trustworthy manner, reputation mechanisms can mitigate moral-hazard problems when particular buyers and sellers interact infrequently. However, these mechanisms rely on buyers sharing their private information about sellers, and thus may suffer from too little feedback when provision is costly. We experimentally compare a standard feedback mechanism to one in which sellers can inspect a buyer’s feedback-provision history, thus providing incentives to share private information even when costly. We find fairly high trust and trustworthiness in all markets, with buyers providing costly feedback, especially negative, sufficient to induce trustworthiness. However, feedback-provision histories did not improve outcomes, and at least weakly decreased trustworthiness with experienced participants, as this information enabled sellers to discriminate and ship less frequently to buyers lacking a reputation for information sharing.


Experimental economics Trust Reputation Electronic markets 

JEL Classification

C72 C91 L14 


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Copyright information

© Economic Science Association 2011

Authors and Affiliations

  1. 1.Department of EconomicsWilliams CollegeWilliamstownUSA
  2. 2.Cartesian Consulting Pvt. Ltd.WorliIndia

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